Competition Commission approves Ericsson’s Red Bee acquisition

The UK Competition Commission has provisionally approved the acquisition of Red Bee Media by Ericsson.

The commission cleared, by a majority, the acquisition by Ericsson of Creative Broadcast Services Holdings, the holding company for Red Bee.

The merger was referred by the Office of Fair Trading in October over fears that the deal could drive up the cost of playout services in the UK.

Ericsson currently provides linear playout services to ITV and NBC Universal, whilst Red Bee Media supplies the BBC, Channel 4, UKTV and BT Sport among others.

The commission provisionally found that taking into account the significant uncertainty about the state of the market at the end of Ericsson’s recently extended contract with ITV – including the potential for significant changes in technology and for significant developments in the market during the lengthy intervening period – the likelihood of ITV’s position being significantly weakened by the merger was remote.

The commission also found that the merger would have little impact on the BBC because ecause of the way that the BBC plans to conduct the tender process and the potential for other competitors to exert the same level of competitive constraint on the BBC’s incumbent provider Red Bee Media as Ericsson would have in the absence of a merger.